BEIJING/BRUSSELS, March 21 (Reuters) - China and the
European Union have reached a deal to end a dispute over
European wine exports to China, the latest sign of improving
ties and just days before China's president visits Europe.

Beijing opened an inquiry last year into whether Europe was

selling wine in China at unfairly low prices. The move was
widely seen in Europe as retaliation over EU efforts to hit
Chinese solar panels with punitive import duties.

The solar panels dispute was resolved, but China had pressed
ahead with the wine case, saying it was a separate issue despite
European expectations that the inquiry would also be dropped.

Paris was especially eager to see the probe called off. It
remained an obstacle in trade relations between the two
countries before next week's visit by Chinese President Xi
Jinping to the French capital as part of a European tour.

Chinese Commerce Minister Gao Hucheng on Friday welcomed the
deal, which both sides hope will set a precedent in bilateral
relations after the solar-panel spat last year.

"Since the resolution last year of the China-EU solar panel
dispute via dialogue and consultation, China and Europe had been
on the correct track to dealing with trade friction," Gao said.

The agreement was reached by involving Chinese and European
wine producers, with support from Brussels and Beijing, EU
Agriculture Commissioner Dacian Ciolos said.

Under the terms of the deal, European producers have
committed to providing technical assistance to help develop the
Chinese wine industry. In return, Chinese buyers will promote
European wine more widely in China.

France, the world's biggest wine producer by value, has in
the past called China's decision to consider duties on French
wine "inappropriate and reprehensible".

EU wine exports to China excluding Hong Kong, which EU
officials say was not covered by the investigation, reached 257
million litres in 2012, with a value of nearly $1 billion. More
than half came from France.

The EU is China's most important trading partner and China
is second only to the United States for Europe in terms of
trade. But growing Chinese export volumes have raised concerns
in the EU, which is struggling to overcome a debt crisis, about
the impact on its industries.

TELECOMS ROW REMAINS

China and Europe also resolved another dispute this week,
when Germany's Wacker Chemie said Chinese authorities
had agreed to refrain from charging the company anti-dumping
tariffs on polysilicon, which is used in making solar panels.

Of the remaining big disputes between China and the European
Union, only one over telecoms remains.

The European Commission has threatened to open an
investigation into accusations of unfair pricing by China's
Huawei, the world's number two telecoms equipment
manufacturer, and ZTE, the world's fifth largest.

European manufacturers Ericsson, Nokia Siemens
and Alcatel-Lucent have told EU officials
they have suffered as a result of cheap Chinese imports of
telecoms gear, although they are not prepared to make a formal
complaint for fear of reprisals in China.

Huawei and ZTE deny breaking any rules and both EU Trade
Commissioner Karel De Gucht and China's Gao have signalled that
the dispute could also be resolved soon, although they have
declined to give details.

China's decision to award billions of dollars in contracts
to the three European companies to supply equipment for mobile
networks is thought to have gone some way to easing tensions.

China is now the world's largest market for mobile data
services and smartphones, and its market is growing more than 50
percent a year, according to Alcatel-Lucent.
(Additional reporting by Robin Emmott in Brussels; Editing by
Larry King)